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Tips for Claiming a Moving Expense on Your Tax Return

Tips for Claiming a Moving Expense on Your Tax Return

December 16, 2015 By King Relocation


Tax Time

Let’s face it, none of us looks forward to tax season, but it is a necessary part of our lives. On that same token, no one wants to pay more taxes than absolutely necessary, and one of the ways to reduce your tax burden is through deductions, such as moving and relocation expenses.

If you’ve moved during 2015 to start a new job, transferred to a new city or state with your current employer, or are returning to the U.S. to work or retire after living abroad, the good news is that you may be able to deduct some of your relocation expenses on your 2015 federal income tax return. However, there are a few requirements that must be met, and not all expenses will qualify for a deduction.

To help taxpayers better understand the laws and requirements surrounding the deduction of moving expenses, the IRS offers guidelines in IRS Publication 521 (2015), Moving Expenses. And, to begin with, your relocation must fulfill the following criteria:

It closely relates to the start of work. You can consider moving expenses incurred within one year from the date you first reported to work at the new location.
It meets the distance test. The distance between your new job and your former home must be at least 50 miles farther than your previous workplace is from that home.
It meets the time test. If you’re an employee, you must work full-time for at least 39 weeks during the 12 months after you move. The weeks worked need not be consecutive, or for the same employer. If you’re self-employed, you must work at least 78 weeks during the first 24 months after moving, including at least 39 weeks during the first 12 months.

With the “time test” there are some exceptions that can be made in the case of death, disability and involuntary separation. Additionally, members of the armed forces whose relocation is due to a military order or permanent change of station do not have to satisfy either the “distance” or “time” tests.

If your recent relocation passes the “time” and “distance” tests, you then need to know which moving expenses will qualify for an IRS deduction, and which ones will not. Here are some examples of qualifying expenses that can be deducted from your tax return:

Travel: Costs for you and your family (by the most direct route available by conventional transportation) to travel to your new home, including one day’s lodging (excluding meals) along the way. Travel also includes the use of your vehicle during the move, either by claiming actual expenses, or by claiming the standard mileage rate of 23 cents per mile. For either method, you can add parking fees and tolls.
Relocation Services: The cost of packing and transporting household goods, personal effects, pets and vehicles. This includes fees paid to professional packers and movers. Note that the cost of moving personal belongings from a location other than your old residence, such as a summer home or a relative’s home, is limited to the amount it would have cost to move them from your previous home.
Storage: Storing and insuring your possessions for up to 30 days after they leave your former home but before being delivered to your new home, in the event that there is a delay before you can move in.
Utilities: Fees to disconnect and/or connect utilities at either end of the move.
Domestic vs. International Moves: You may deduct expenses regardless of whether you’re moving within, to or from the U.S., although special rules for calculating moving expenses outside the U.S. apply. See IRS Publication 54 for details on international moves.

Some of the expenses that do not qualify for an IRS deduction include buying and selling a home; loss on the sale of your old home; charges for signing or breaking a lease; and, security deposits.

Please keep in mind that this article is only meant to inform, and we recommend that you always consult your tax professional or attorney when making deductions for relocation expenses on your tax return. The IRS provides information on their Website as to how to go about deducting these expenses from your tax return. You can also find additional guidance for this process via the aforementioned IRS Publication 521.

About King Companies
As an agent of United Van Lines, King Companies has the resources and expertise to be your “go-to” resource for all relocation needs. Whether you are relocating your household, moving an office, or are in need of logistics services, we strive to ensure that your next move will be the best you will ever make. Call us today at 800-854-3679 to learn more.

We hope that you will consider King Companies for your future relocation needs. To learn more about our services, visit is at www.kingcompaniesusa.com. And, don’t forget to connect with us on Twitter, Facebook and Google+ for our latest news and updates!

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